Regulatory and policy options to encourage development of ...

MODULE 9: RENEWABLE ENERGY: REGULATORY AND POLICY OPTIONSpage 9.89 Bulk Oil Storage and Transportation Company (BOST): Bulk Oil Storage andTransportation is a Government-owned, limited liability company that undertakesplanning for storing and managing strategic stocks of petroleum products.BOST runs several storage depots in the port cities of Tema and Takoradi,and in seven other locations around the country. In addition, BOST is responsiblefor primary distribution of the products. Funding for maintaining thereserves comes from a special levy on petroleum products. Oil marketing companies (OMCs) and retail outlets: The oil marketing companiesare responsible for distribution and marketing of petroleum products,mainly through small retail outlets countrywide.2.2. Status of energy sector reforms,current policiesThere have been a number of energy sector reforms in Ghana over the years,mostly focusing on the power subsector: expanding capacity and extending theelectrical grid across the nation and to smaller communities. These efforts havebeen largely successful and have led to the electrification of all district capitalsunder the National Electrification Programme. Although renewable energy has notfeatured prominently in the reforms, its role has largely been to supplement thenational grid by providing power as a stopgap measure and for providing electricityto inaccessible communities.The most recent energy sector reforms were started in 1997, when the World Bankindicated that support would no longer be provided for electricity projects indeveloping countries unless there was a clear commitment by the Governmentto reforming the sector. While the reforms were undertaken primarily to securean IDA credit for the construction of the 330 MW Takoradi thermal plant, therewas also a view to secure private participation in the development of future electricityinfrastructure. At the time that the reforms were instituted, there was verylittle external investment in energy, which led to poor quality service and poorfinancial performance by utilities. In broad terms, the reforms sought to achievethe main goals listed below:1. Establish a new, effective regulatory framework;2. Allow for competition in the generation and wholesale supply of power;3. Commercialize existing state-owned power utilities, enhance their managementand accountability, and secure private sector participation;4. Unbundle the utilities;5. Minimize the Government’s role and use of public resources in the sector, particularlythrough subsidies;